Project economics for near- shore systems PRO-TIDE Conference … · 2015-11-05 · Project...
Transcript of Project economics for near- shore systems PRO-TIDE Conference … · 2015-11-05 · Project...
Project economics for near-shore systemsPRO-TIDE ConferencePort of Dover
Simon Cheeseman – Wave & Tidal Sector Specialist
30th September 2015
Catapults:A long-term vision for innovation & growth
Catapults
• Established by Innovate UK, part of a network of 7
Catapults
• Designed to transform the UK's capability for innovation
• Generate income from the 1:1:1 leveraged funding model.
The Offshore Renewable Energy Catapult
Abundant, affordable energy from offshore wind, wave and tide
ORE Catapult
• The Offshore Renewable Energy Catapult
- is the UK’s flagship technology innovation and research centre
for offshore wind, wave and tidal energy
- collaborates with industry, academia and Government to reduce
the cost of offshore renewable energy and create UK economic
benefit
- delivers prioritised research underpinned by world-class test and
demonstration facilities
Locations Size
Glasgow
Blyth (National Renewable Energy Centre)
c120 employees
Why are we doing this?
Tidal energy is capable of supplying 20-100TWh of the 350TWh of the UK’s annual electricity demand
Deep water 40m to 60m bottom
mounted, Trend is for turbine
sizes between 1MW and
1.5MW
1/7th power law – where is
optimised tidal flow across
ebb and flow tides
Surface and mid water floating – seek
to exploit better resource
Can be shallower 10m – 40m
Trend is for turbine sizes
between 0.5MW and 1.5MW
We’ve been doing this for years !
Micro hydro designs 0.5-5 kW
are cheap, ecologically friendly
and are suitable for developing
countries.
Floating Systems
Example - PLATO-O Sustainable marine Energy
Isle of Wight, UK
Barrage and Lagoons
Barrage or lagoon
Principle is well
understood.
Technology is
available.
Civil costs and
large area
environmental
concerns make
projects difficult to
fund and launch.
Minesto
Minesto - Deep Green could produce
electricity at sites with velocities
between 1.2-2.5 m/s.
2nd generation technology. Control
systems and maintenance access
Near Shore/Off shore - Pros and Cons
Near Shore Off Shore
Features Pros Cons Pros Cons
Locations
Easy access. Wider
choice, less competition
for sites
Local objections to lease
and license consents.
Seasonal river flow impacts
output
Competition for high
resource sites
Vagaries of slack tide,
weather windows
Site
Characterisation
May mean
easier/cheaper to deploy
monitoring equipment
Wave action may hinder
data collection. River flows
will require selective device
positioning in channel cross
section
A growing number of
environmental engineers
claim to be able to
undertake this work
Expensive upfront cost
made difficult in areas of
high tidal flow
EnvironmentalEnable access across
estuaries (Barrage)
System features potentially
visible form shore
Not generally visible from
shore
Can offer stepping stone
for invasive species
Capex
Potentially lower design
and materials costs if in
a sheltered environment
Design standards do not
enable lean design
techniques
Meygen model has raised
funding (but may not be
easily repeatable
High costs driven by over
engineering, need for
survivability, installation
costs
Opex
Greater accessibility for
maintenance
Small installations may not
offer rich economies of scale
Experience is growing
from Alstom, AHH,
Atlantis, Scott
Renewables
Poor reliability resulting in
unplanned maintenance
interventions
Decommissioning
Proximity to shore and
sheltered location will
aid logistics
Extraction may be highly
visible requiring greater post
landscaping
Design consolidation will
enable streamlined
extraction operations
Distance frim shore and
reliance on slack water
weather window
combinations
Project financing
Community orientated
sites may attract local
investment
Traditional financiers may be
sceptical of achievable IRR
particularly on small projects
ETI TEC study indicated
TEC at 200MW could be
cost competitive
Poor IRR until at multi
device and high MW
capacity
Tidal Stream First Arrays Estimates
Source: ORE Catapult internal analysis
10
Capex (£/kW) Low High
Device 3,500 3,000
Foundations 800 900
Electrical 900 2,100
Installation 1,100 1,000
Other 700 2,200
Total Capex 7,000 9,200
Capex and Opex ranges
driven by various factors,
including:
• Site conditions
• Device type
• Foundation type
• Installation method
• Electrical architecture
• Risk/contracting approach
• Grid connection options
• On/Offshore O&M strategy
Opex (£/kW) Low High
O&M 140 300
Insurance 10 10
Total Opex 150 310
Notes:
• Published project costs for initial Raz Blanchard arrays in France have a range of £6,000 - £13,000 per kW
• Anecdotal evidence from Canada suggests similar range for first arrays
Conclusions
• Tidal energy is capable of supplying 20-100TWh of the 350TWh of
the UK’s annual electricity demand
• Near-shore locations, estuaries, tidal rivers and coastal defense
infrastructure systems may offer an achievable route to market
• Changes in design standards enabling leaner designs reducing
Capex costs and definitive data informing cost modelling will
influence investors
• ORE Catapult is prepared to work with technology and project
developers to understand how we can best serve their interests
11
ORE Catapult
Inovo
121 George Street
Glasgow
G1 1RD
T +44 (0)333 004 1400
F +44 (0)333 004 1399
ore.catapult.org.uk
ORE Catapult
National Renewable Energy Centre
Offshore House, Albert Street
Blyth, Northumberland
NE24 1LZ
T +44 (0)1670 359 555
F +44 (0)1670 359 666
Contact us
12